The global market delivered a solid performance in 2025, with stocks, bonds, and gold posting simultaneous gains. Major global equity markets generally strengthened, with U.S. tech stocks and Asian markets rising between 10% and 30%.
Global Market Performance in 2025 (As of December 31, 2025)
The global market delivered a solid performance in 2025, with stocks, bonds, and gold posting simultaneous gains. Major global equity markets generally strengthened, with U.S. tech stocks and Asian markets rising between 10% and 30%. This rally was primarily driven by the continuous momentum of artificial intelligence (AI) technology, as related companies maintained robust growth in profitability and capital expenditure. Meanwhile, global monetary policy shifted to an easing cycle, with the Federal Reserve implementing three interest rate cuts in the second half of the year. This significantly boosted risk asset performance and effectively hedged market volatility triggered by the Trump administration's reintroduction of tariff policies in the first half. The lower interest rate environment also strongly supported the positive performance of the bond market. Additionally, a weaker U.S. dollar further enhanced the relative attractiveness and investment returns of non-U.S. dollar assets and gold. In contrast, traditional commodities such as crude oil and cryptocurrencies performed relatively weakly, failing to secure significant premiums. Hedge fund and private credit strategies continued to deliver stable returns, demonstrating strong resilience against market fluctuations.
2026 Global Macroeconomic Outlook
The market generally expects global economic growth to remain stable within a range of 2%–3% in 2026, presenting a pattern of "resilient growth."
Growth Paths of Major Economies
· United States: The economy is expected to achieve a soft landing, with GDP growth ranging from 1%–2% in 2025. The core drivers lie in the sustained resilience of consumer demand and the steady recovery of corporate earnings (S&P 500 earnings per share are projected to grow by approximately 14% year-on-year). Despite persistent fiscal deficit pressures, Sino-U.S. economic and trade relations may usher in a phase of détente. If a bilateral agreement is reached, the actual tariff level may be lower than current market expectations, potentially boosting global trade confidence and investment sentiment.
· China: Economic growth is estimated at around 5% in 2025. The policy focus in 2026 will shift to boosting domestic demand, supported by proactive fiscal policies and moderately accommodative monetary policies.
Global Monetary Policy Outlook
· Federal Reserve: It is expected to continue a moderate rate-cutting cycle, with a total reduction of 25–50 basis points throughout the year, potentially adjusting the target rate range to 3.0%–3.25%.
· European Central Bank: The policy rate is expected to remain stable at around 2%, though there is a possibility of a modest rate hike by the end of 2026 to address inflationary pressures.
· Bank of Japan: The overall policy stance for the year tends to be "pause and watch," with limited room for further rate hikes, and only a potential 25-basis-point increase.
Excerpts from Institutional Views
· JPMorgan Chase: Global growth remains resilient. Global GDP growth is forecast at 2.5% in 2026 (slightly below 2.7% in 2025), with U.S. growth projected at 2.0%. U.S. inflation remains sticky, but the impact of Trump's tariffs may be partially offset by productivity gains from AI and falling energy prices.
· HSBC Holdings: Maintains an overall optimistic outlook, believing the U.S. economy will stay on a potential growth track, while the Eurozone is expected to recover benefiting from fiscal stimulus measures.
Three Core Growth Drivers for 2026
Energy Bottlenecks and Profit Realization in the AI Boom
As electricity demand from AI data centers surges (projected to account for approximately 8% of total U.S. electricity consumption in 2026), the world is facing an unprecedented "power shortage." Reliable power supply has become a critical prerequisite for sustaining AI capital expenditure. This trend has created strong long-term demand for grid modernization, nuclear power, gas-fired peaking power plants, and energy transition metals such as copper.
Furthermore, market focus is shifting from AI chip manufacturers like NVIDIA to those who can truly translate AI into commercial value. Companies in sectors such as finance (optimizing risk management and automated trading with AI), healthcare (accelerating new drug R&D), and industrial software (improving supply chain efficiency) are using AI to effectively reduce costs or create new revenue streams—rather than merely making massive capital expenditures. Thus, they possess more sustainable profitability and valuation appeal.
Long-Term Bull Market for Gold Driven by De-Dollarization
Central banks worldwide (especially in emerging markets) continue to significantly increase their gold holdings to hedge against risks from U.S. dollar hegemony, expanding fiscal deficits, and geopolitical uncertainties. Global central bank gold purchases hit a record high in 2025, and this trend is set to accelerate further in 2026. DBS and LGT have set a target price of $5,100 per ounce for gold by the end of 2026, citing reasons including the U.S. national debt breaking new highs, Fed rate cuts in a non-recessionary environment suppressing real interest rates, and the accelerated formation of a global "multipolar currency system." Gold has evolved from a traditional safe-haven asset to a core tool for global balance sheet reallocation, boasting long-term allocation value.
Notably, amid this macro wave centered on "de-dollarization" and "real asset reallocation," Bitcoin is gradually being regarded by some investors as a complementary or alternative digital reserve asset to gold. Despite significantly higher volatility than gold, the continuous inflow of institutional funds through compliant channels such as spot Bitcoin ETFs reflects rising market demand for assets that are "sovereign-free, censorship-resistant, and have a fixed total supply." Institutions including JPMorgan Chase and Goldman Sachs note that the correlation between Bitcoin and gold strengthened notably in 2025, with both assets rallying in tandem especially during periods of rising expectations for Fed easing. However, gold still holds irreplaceable advantages such as central bank endorsement, deep liquidity, and absence of counterparty risk, making it the preferred safe-haven instrument during heightened systemic risk. In contrast, Bitcoin plays more of a role as a tail hedge for high-risk appetite or a speculative diversification tool.
Government Fiscal Policies and Defense Spending as New Growth Engines
Against the backdrop of diminishing effectiveness of global monetary policies, major economies including the U.S., Germany, Japan, and India are shifting to a growth model led by fiscal policies, stimulating the economy through large-scale spending on defense, infrastructure, and industrial subsidies. This fiscal-led paradigm not only supports cyclical sectors such as defense, industry, and construction raw materials but also creates opportunities for priority-secured private credit and other alternative assets. Government spending is crowding out traditional bank credit, freeing up space for private capital.
Additionally, escalating global geopolitical tensions (in Ukraine, the Taiwan Strait, and the Middle East) are driving major economies to significantly increase defense budgets, forming a structural spending wave that will last for several years. NATO has raised its defense spending target from 2% to 5% of GDP, while countries including Germany, Japan, and India have announced multi-billion-dollar military modernization programs. This trend benefits not only traditional defense contractors (such as Lockheed Martin and Raytheon) but also drives high-end materials, cybersecurity, satellite communications, unmanned systems, and other sub-sectors. Morgan Stanley, Goldman Sachs, and LGT all list "defense" as a high-conviction overweight sector for European and Japanese equity markets in 2026.
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